New Zealand Professional Investment Services Firm

Forsyth Barr

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

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New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

<h2>Stride Property<br>Taking Office for a Spin</h2>
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<p><strong>RESTRICTED</strong></p>
<p>Stride Property Group (SPG) has announced that it will demerge and list its office assets, as had been signalled at the FY21 result. The listed entity will be called Fabric and be managed by SPG. SPG also announced that Fabric has conditionally acquired 110 Carlton Gore Road, Newmarket for NZ$217.5m on a contract yield of 5.0% via a fund-through structure. SPG has revised FY22 dividend guidance to between 9.34cps and 9.36cps, which equates to the previous guidance of 9.91cps when combined with Fabric. Our rating is RESTRICTED.</p>
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<h3>Division of assets</h3>
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<p>SPG will transfer ten office assets across Auckland and Wellington and the portfolio will grow to 11 after the acquisition of 110 Carlton Gore is complete. This leaves SPG with one office property at 55 Elizabeth Lane, Wellington. SPG will retain ownership in order to complete works on the building and may sell it to Fabric after completion. SPG expects the demerger to result in NZ$5.2m of additional base management fees and lift total external assets under management to NZ$3.2bn.</p>
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<h3>Details</h3>
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<p>Fabric shares will be allocated to existing SPH shareholders on a 1:4 basis as part of the demerger, so SPG shareholders will own c.25% of the new fund. SPG will also retain a cornerstone holding in Fabric of between 25% and 32% (depending on the final amount raised in the IPO) after the listing and offer is complete, with no plans to sell down until at least May 2023 when Fabric reports its FY23 result. Fabric is targeting to raise NZ$250–290m of new equity. SPG expects its balance sheet gearing to reduce to 10–21% as a result of the demerger.</p>
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<h3>Timeline</h3>
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<p>The institutional offer and&nbsp;bookbuild&nbsp;for Fabric shares opens on 21 September 2021 and the broker firm offer and SPG shareholder offer&nbsp;opens on 22 September 2021. Broker firm and SPG shareholder offers close on 30 September, with allocation to SPG shareholders, settlement and allotment occurring on 5 October. The&nbsp;demerger&nbsp;will occur at the same time as the completion of the IPO, and shares will begin&nbsp;trading on 6 October 2021.&nbsp;</p>
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Stride Property Taking Office for a Spin

RESTRICTED
Stride Property Group (SPG) has announced that it will demerge and list its office assets, as had been signalled at the FY21 result. The listed entity will be called Fabric and be managed by SPG. SPG also announced that Fabric has conditionally acquired 110 Carlton Gore Road, Newmarket for NZ$217.5m on a contract yield of 5.0% via a fund-through structure. SPG has revised FY22 dividend guidance to between 9.34cps and 9.36cps, which equates to the previous guidance of 9.91cps when combined with Fabric. Our rating is RESTRICTED.


Division of assets


SPG will transfer ten office assets across Auckland and Wellington and the portfolio will grow to 11 after the acquisition of 110 Carlton Gore is complete. This leaves SPG with one office property at 55 Elizabeth Lane, Wellington. SPG will retain ownership in order to complete works on the building and may sell it to Fabric after completion. SPG expects the demerger to result in NZ$5.2m of additional base management fees and lift total external assets under management to NZ$3.2bn.


Details


Fabric shares will be allocated to existing SPH shareholders on a 1:4 basis as part of the demerger, so SPG shareholders will own c.25% of the new fund. SPG will also retain a cornerstone holding in Fabric of between 25% and 32% (depending on the final amount raised in the IPO) after the listing and offer is complete, with no plans to sell down until at least May 2023 when Fabric reports its FY23 result. Fabric is targeting to raise NZ$250–290m of new equity. SPG expects its balance sheet gearing to reduce to 10–21% as a result of the demerger.


Timeline


The institutional offer and&nbsp;bookbuild&nbsp;for Fabric shares opens on 21 September 2021 and the broker firm offer and SPG shareholder offer&nbsp;opens on 22 September 2021. Broker firm and SPG shareholder offers close on 30 September, with allocation to SPG shareholders, settlement and allotment occurring on 5 October. The&nbsp;demerger&nbsp;will occur at the same time as the completion of the IPO, and shares will begin&nbsp;trading on 6 October 2021.&nbsp;


Stride Property: Taking Office for a Spin